Trade gloom ends European streak


Sun, May 19, 2019 - Page 14

European stocks on Friday snapped a three-day winning streak amid global trade jitters after Beijing ratcheted up its war of words with Washington, while the end of Brexit talks between British political parties put a lid on risk sentiment.

The Chinese Communist Party’s People’s Daily used a front-page commentary to say that the trade spat with the US would never bring China down, while talks on Brexit between the UK’s opposition Labour Party and the governing Conservatives ended without agreement.

The pan-European STOXX 600 index fell 0.4 percent, sliding from Thursday’s 10-day closing peak.

However, the benchmark posted a 1.2 percent weekly gain, its best performance since early last month.

Ben Lofthouse, head of global equity income at Janus Henderson, said investors “have moved from being slightly risk-on to risk off.”

“Markets don’t deal well with circumstances that are not well-rehearsed. For global equities, trade is on people’s mind more than Brexit,” Lofthouse said.

Germany’s exporter-heavy DAX declined 0.6 percent, with BMW AG shedding 5.2 percent as its shares traded ex-dividend.

Milan-traded shares fell 0.2 percent, while peers in Paris and London edged 0.2 percent and 0.1 percent lower respectively.


The process of the UK’s complex divorce from the EU was jolted by the opposition Labour Party pronouncing the death of last-ditch talks, due to deepening fractures in British Prime Minister Theresa May’s government.

The news knocked sterling, but supported the shares of exporters on the FTSE 100, as a softer pound broadly boosts the value of their overseas earnings.

Real-estate stocks shed 1.2 percent, with Hammerson PLC down 2.2 percent following a price target cut on the stock by Royal Bank of Canada.

Banks dropped 1.1 percent, with the stocks of most lenders on the sector index ending lower. Italy’s Banco BPM SpA fell 3.2 percent.

Stocks of automakers and their suppliers ended a fourth straight week lower as they dropped 1.1 percent on the day. The sector is especially sensitive to worsening US-China trade tensions.

Paris-listed Valeo SA fell 1.7 percent, while Faurecia Group dropped 1.3 percent.


Food delivery companies tumbled after the UK’s Deliveroo, which is unlisted, secured funding from Inc.

Just Eat PLC sank 8.2 percent, while Amsterdam-listed NV and Frankfurt-listed Delivery Hero SE shed 4.6 percent and 2.3 percent respectively.

In a bright spot, EasyJet PLC rose 5.3 percent after the budget carrier said that it would meet this year’s expectations, despite a weaker trading environment.

The stock boosted the travel and leisure index, which gained 0.8 percent.